Accounting and taxation are two fields of study from which specific terms and procedures result. It is important to keep ourselves updated on them. Throughout this entry, we will introduce you to the basics of the Fiscal Incorporation Regime (RIF). Remember to always seek the guidance of field experts who can help you get the best results.
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The Fiscal Incorporation Regime, also known as RIF, came into effect on January 1, 2014.
What is the Fiscal Incorporation Regime and what are its benefits?
This type of regime is aimed at natural persons whose annual income does not exceed $2 million. It was created as part of a strategy by the Tax Administration Service (SAT), and it would come to replace the small taxpayers regime (REPECO). The RIF now allows to issue invoices and file taxes bimonthly.
Once registered in the regime, taxpayers will remain enrolled for only 10 years.
Once the ten-year period has expired, taxpayers will enter the regime of taxpayers with business and professional activities.
The RIF is ideal for natural persons who own grocery stores, copy shops, hair salons, wood shops, plumbing stores, and fruit stands, as well as taxi drivers, construction workers, among others.
Some of the benefits of the RIF include:
● Not paying income taxes in the first year. The tax is reduced by 10 percent from the second year onward.
● Receiving financial support to enroll in a tax training course, buy machinery or furniture, among other things.
One of the responsibilities that comes with this regime is to bill clients. To that end, the Tax Administration Service (SAT) offers an electronic tool. It is important to consider that taxpayers will be immediately disqualified from the RIF if their annual income exceeds $2 million, as well as for noncompliance with their tax obligations.
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We hope that this information helps you identify the benefits of this type of regime. Remember to seek constant guidance from experts who can help you improve your decision-making.
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